Bank of Canada’s Rogers Urges Small and Medium Firms to Invest in AI

Article content(Bloomberg) — The Bank of Canada’s second-in-command is warning of future inflation risks if investment in artificial intelligence is concentrated among the country’s big companies.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentSenior Deputy Governor Carolyn Rogers said that while large firms have the scale and capacity to make “big bets on technology,” the country’s ailing productivity is more likely to be repaired if there’s broader adoption of AI across small- and medium-sized companies.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentThat’s because large businesses — many of which face limited competition — are less likely to pass savings from productivity gains into higher real wages or lower prices, she said Thursday at an AI conference in Toronto. Article contentArticle content“You also don’t want things concentrated in big firms. That’s not good for productivity either,” Rogers said in a fireside chat at the event hosted by the University of Toronto. “If all of the gains are concentrated in big firms, they aren’t likely to translate to gains across the economy.”Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentIn 2023, 98% of businesses in Canada were defined as “small,” employing one to 99 paid employees, according to government data. Medium-sized firms, which have 100 to 499 paid employees, represent 1.5% of the total.Article contentJust 0.3% of Canada’s businesses are “large” — defined as employing 500 or more people. But over a third of the country’s population work for these firms, and they’re more likely to make large-scale capital investments.Article contentIn a speech last week, Governor Tiff Macklem said the bank was seeing little evidence of widespread uptake of AI among Canadian businesses. Rogers echoed those comments Thursday, but added that some of the “low hire, low fire” sentiment in the country’s labor market may reflect firms that are beginning or weighing adoption of AI.Article contentVass Bednar, managing director at the Canadian Shield Institute think tank, agrees that there needs to be a more targeted policy discussion about who stands to benefit most from investment into AI.Article contentArticle content“We can’t just blindly chase productivity gains through AI adoption itself,” Bednar said in an email.Article content“Gains will accrue to the firms that own the intangible layer like data, intellectual property, models and computing access,” she said, adding that lawmakers also need to focus on fostering competition and consumer choice.Article contentRogers has often spoken bluntly about Canada’s lagging productivity, calling it an emergency in early 2024. Last year, she also offered major criticism of the lack of competition in the country’s financial system, saying Canada’s largest banks were an oligopoly.Article contentOn Thursday, Rogers said the economy can add labor to boost production temporarily, but capital deepening offers a more permanent boost.Article content“To make long-term fundamental change, to raise growth on a more permanent basis, to increase production per employee, increase our living standard, you need to make those investments,” she said.Article contentTrending Telus picks former CIBC CEO Victor Dodig to replace Entwistle at helm Telecom Russia memo sees return to U.S. dollar system in pitch made for Trump Economy David Rosenberg: Memo to Mark Carney: Don’t bring a butter knife to an economic gun fight Economy Posthaste: Why Canada's job market is in a lot worse shape than you think News Telus Picks Former Bank Chief Dodig to Replace Longtime CEO PMN Business Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Telus picks former CIBC CEO Victor Dodig to replace Entwistle at helm Telecom Russia memo sees return to U.S. dollar system in pitch made for Trump Economy David Rosenberg: Memo to Mark Carney: Don’t bring a butter knife to an economic gun fight Economy Posthaste: Why Canada's job market is in a lot worse shape than you think News Telus Picks Former Bank Chief Dodig to Replace Longtime CEO PMN Business